This complaint is filed by the Firm which is duly registered through its partners against the insurance company alleging deficiency in service on its part. According to complainant, they had taken two polices in respect of dump steel barge called Kena-1. One policy was in respect of total loss of barge and other policy was in respect of expenses and damage incurred by the complainant in repairs and trying to make seaworthy said barge. In respect of total loss of barge, complainant has filed separate complaint. According to complainant, the barge was constructed in 1997 and it was originally owned by Ardeshir B. Curostji and Sons Private Limited. Said owners sold the barge to Ghai Shipping and Transports Private Ltd. and from them the complainant had purchased the said barge on 04/12/1990. Initially it was called ABC.X, but complainant changed name of the barge to Kena-1. On 05/03/1991 they received approval for the change of the name from Mercantile Marine department, Bombay district Government of India. The certificate of registration has been issued by the Registrar of Indian Shipping, Bombay on 28th June, 1991 in lieu of certificate dated 23rd April, 1977 on account of transfer of ownership. In May 1992 the barge was to be toured from Bombay to Rozi Port, Jamnagar, Gujarat State. It was being towed by vessel called Dhanprasad. Accordingly on 20th May, 1992 a valuation report in respect of said barge was prepared by Dave & Associate, registered marine surveyors. They valued the barge at about `19,50,000/- and they opined that barge was in seaworthy condition. Said valuers also inspected Dhanprasad, the vessel which was to tow Kena-1 and found that Dhanprasad was also in seaworthy condition. The copy of agreement of towing the Kena-1 and copy of survey report prepared by Dave & Associates has been placed on record. Similarly, the complainant also made ultrasonic survey of the barge on 21/05/1992. Copy of said report is at Exhibit-D. On 22/05/1992 complainant got Kena-1 insured with Oriental Insurance Co.Ltd. for its voyage from Bombay to Jamnagar under towing by Dhanprasad and insurance was in respect of Hull and machinery for assured amount of `19,50,000/-. Complainant paid premium of `16,257/- to the insurance company and policy was issued on 22/05/1992. On 22/05/1992 Dhanprasad along with Ken-1 left Bombay port for Jamnagar. During the voyage part of the machine called manifold broke down. Hence on 27/05/1992 said barge was taken to Veraval port. Complainant informed said fact to the insurance company. At Veraval machine was repaired and on 02/06/1992 after getting ship cleared, the barge proceeded to Rozi port, Jamnagar with the help of towingship Dhanprasad. On way to Jamnagar, the connected shed and Hedni valve start of the engine broke down due to which the barge on 04/06/1992 along with the vessel were taken to Mangrol. After repairing the ship on 12/06/1992 the vessel along with the barge proceeded to Jamnagar. When the ship left Mangrol at Jamnagar sea was clam, weather was peaceful. However, at midnight sea became violent and strong, wind started blowing from western direction. Due to this and purely due to natural causes, the connection between the vessel and barge broke down and the barge started getting dragged towards Mangrol. The Tandel and other crew of the vessel changed the direction of the ship and tried to catch the barge but because of bad whether, they could not catch the barge. On 13/06/1992 the barge went adrift and landed on shore near Mangrol port but since there was shallow water, the vessel Dhanprasad could not reach the barge. The crew members from the barge jumped down for safety. Thereafter, the crew from Dhanprasad went to Mangrol port and tried to rescue the barge by tying the connecting ropes. This was not possible as there was major damage in the bottom part of the barge because of it having collided with the shore. The complainant addressed a letter dated 15/06/1992 to insurance company and informed that barge has been grounded near Magrol port and requested for a survey of the barge to enable the complainants to arrange for removal of the barge to a safer place and avoid further damage. Copy of the letter dated 15/06/1992 is annexed hereto and marked Exhibit-F. For avoiding further damage on 22/06/1992 Sea Scan Services Private Limited the surveyor acting for the opponent on instructions of the opp.party addressed letter to the complainant asking them to call quotations for shifting the barge to a safer place where thorough inspection could be conducted. On 23/06/1992 the Sea Scan Services Pvt. Ltd. recorded the fact that they had taken personal investigation of the barge and had given certain instructions regarding shifting the barge to a suitable place. On 24/06/1992 the opponents referred to this letter dated 23/06/1992 and asked the complainant to send a cheque of `31,785.50 being the five months premium to enable them to cover the risk. On 10/07/1992 further policy of ` 19,50,000/- was executed by opp.party in favour of the complainant in respect of Kena-1 barge for the Hull for the period from 10/07/1995 to 09/07/1993. All the premium amounts in respect of said policy had been paid by the complainant.
Complainant thereafter invited quotations from various contractors for shifting and repair of barge and the lowest quotation received from Popular Entrprise, Jamnagar was forwarded to Sea Scan Services Private Limited by the complainant through their letter dated 06/11/1992. In the meanwhile on 19/09/1992 the statement of the Tandel concerning the accident to the barge was recorded in the Port Officer’s office and a copy of the statement is annexed at Exhibit- L. Thereafter attempts were made to shift the barge for repairs but those attempts failed therefore on 10/02/1993 the complainant addressed a letter to the M/s. Sea Scan Services Pvt. Ltd. On 26/02/1993 complainant further wrote a letter to the opp.party regarding the efforts made to shift the barge and opined that barge was not refloatable and unsalvageable, copy of which is marked at Exhibit-M. Subsequently on 16/03/1993 Sea Scan Private Limited addressed a letter to the complainant asking the complainant to get barge checked and repaired from one Venkatesh Engineering Works, Jamnagar. Even Venkatesh Engineering came to the conclusion that the barge was unfloatable and finally it was decided to treat the barge as unfloatable and sell it as scrap. Thereafter with consultation in terms of letter with Sea Scan Services Pvt. Ltd. which is annexed hereto and marked Exhibit-N, on 30th April, 1993 the complainant wrote a letter to the opponent to the effect that if the opponent found the amount offered by the parties contacted the complainant directly as inadequate, the opponents were free to advertise and get a higher price for the scrap value of the barge. In the meanwhile on 11/05/1993, complainant wrote a letter to the port officer, Veraval for cancellation of registry certificate. Finally offer was received for`3 lakhs to purchase the said barge as scrap. This was conveyed to opponent company and ultimately, said barge was sold for `3 lakhs and with the permission of opp.party, they had received consideration of ` 3 lakhs for the barge, sold as scrap. In the second week of May, 1994 complainant submitted a claim to the opp.party claiming cost of material and labour for salvage payment at Mangrol, Gujrat as per second policy. Claim in present complaint is in respect of these amounts. Complainant came to know that opp.party had referred the claim of the complainant to Richards Hog International Limited, Bombay for adjustment of loss and for scrutiny of the claim. They wrote one letter to Richards Hog International Limited, Bombay calling upon them to expedite the matter. On 07/04/1995 opponent wrote a letter to Dave & Associates, Vvaluers and Surveyors raising certain queries. Complainant gave reply to all the queries. However, for two years there was no response whatsoever. On 27/06/1997 complainant addressed letter to the opponent making a grievance regarding delay in processing the claim. For the first time after four years on 22/07/1997, opp.party replied to the complainant informing that they had not taken approval from MMD before commencing the voyage and there was no towing approval for commencing towing from Veraval. Complainant pleaded that objections taken by the opp.party were totally unsustainable and unreasonable. They were taken as an afterthought solely to deny the complainant’s lawful claim. According to complainant, he had taken all the necessary steps and mandatory permissions and still flimsy objections were taken by the opp.party to deny the claim. The complainant then met officers of the opp.party explaining said officers correct position. Complainant no.2 personally met Mr.Chakravarty, Divisional Manager of the opp.party, who informed him orally that insurance claim, has been rejected and within one week the complainant would receive formal rejection letter. Only in November-1998 complainant was finally told that claim in policy had been rejected and therefore, complainant pleaded that they had filed the present complaint for claiming reimbursement of the expenses incurred by them for the salvage of the barge.
The entire salvage operation was done under the inspection of the opp.party officers or their agents. Despite this fact, the barge could not be salvaged. The complainant has claimed `5,69,413 towards the salvage of the barge. Said amount is being claimed with interest @18% p.a. and said interest amount comes to `5,71441.34 and thus, the total claim of the complainant for which complaint has been filed is of `11,40,854.64. They also claimed an amount of `1 lakh towards damages for mental trauma and loss of definite time. They also claimed cost of `50,000/- and complainant also filed certain documents and affidavit in support of this claim.
Opp.party filed written statement and contested the claim. According to opp.party, there has been breach of warranties on the part of complainant firm and therefore, present complaint is not maintainable. Opp.party also pleaded in written version that complainant has malafide and vexatious complaint and it must be dismissed with costs. Opp.party pleaded that one of the essential conditions or warranties contained in the policy is that the complainant shall obtain the approval from the Mercantile Marine Department for towing the Kena-1 from the port of Mumbai to Rozi Port. Complainant failed to obtain this approval from the Mercantile Marine Department. It had not obtained the approval from that department. Breach of warranty entitles the insurance company i.e. the opposite party to avoid the contract of insurance and in this particular case, in view of the breach, opp.party rightly repudiated the claim of the complainant. Opp.party also pleaded that after the incident of drifting and grounding of Kena-1 at Magrol, the surveyors were appointed by insurance company. The surveyors i.e. opposite party advised the complainants to take prompt steps to remove the barge Kena-1 to a safer location where it would not be exposed to the rough seas prevalent during the monsoon period. Opp.party further stated that complainants were also advised that the rough monsoon period could adversely affect the condition of the barge and despite being informed so, complainant took no steps to move the vessel to a safer location and the barge contined to remain exposed to the vagaries of weather which caused further deterioration. So, this was a clear cut case of breach of one of the condition of warranty of the policy. It pleaded that said policy was issued to the complainant subject to Institute Voyage Clauses (Hull) with additional trading warranties/conditions which read as under:-
“ subject to deductible of 1% on H & M sum insured for all claim other than TL/CTL each occurrence each claim, warranted tow and towage arrangements approved supervised and found satisfactory by competent surveyors and all their recommendations are complied with and subject to No Objection Certificate from the Mercantile Marine Department. The voyage is covered subject to certificate issued by surveyors certifying the seaworthy condition of the above vessels. This policy excludes the towers liability.”
Opp.party pleaded that a towage survey was allegedly carried out on 21st March, 1992, the report of which stated that both the tow and towing vessel were in apparent seaworthy condition but complainant did not procure necessary “ No Objection Certificate” from Mercantile Marine Department. Opp.party pleaded that towage operation was started from Bombay 22/05/1992. On or before 27/05/1992, the Opp.party was informed by the complainant that during the voyage the tug Dhanprasad along with Kena-1 in tow had to be taken to the port of Veraval on 27/05/1992 for some repairs to the engine of Dhanaprasad. Thereafter, on 04/06/1992 complainant informed opp.party that tug along with the Keena-1 in tow again had to call at the port of Mangrol due to engine trouble. The vessel under tow sailed from Mangrol on 12th June 1992 at 1700 hrs. At about midnight, the two rope partd and the tow (barge Kena-1) drifted and ran aground near the port of Mangrol.
The opposite party was informed about the grounding of the vessel on or about the 15th Junee, 1992. The opposite party appointed surveyors, M/s. Seascan Services Pvt. Ltd. who in turn inspected the barge at the Magrol beach and requested the complainants, vide their letter dated 17th June 1992, to invite tenders to pull the barge to a safer place to carry out through inspection of the barge and to avoid further damage to the said barge. However, as no action was taken by the complainants in this behalf, Seascan Services Pvt. Ltd. again requested the complainants to take immediate action to move the barge to a safer location to avoid further damage. By the same letter, the said surveyor called upon the complainants to forward copies of the MMD approval of the towage arrangement, inspection report of the barge prior to commencement of voyage by reputed surveyors, approval of the towing vessel etc.
After hearing complainant in person and Adv.Ms.Apurva Pohnekar for opposite party, we framed following issues for our consideration and our findings on the same are as under:
Issues: Findings
1. Whether the complainant firm proved
that insurance company wrongfully
repudiated its claim in respect of expenses
and damages incurred by the complainant
in repairing and trying to make seaworthy
while at Mangrol and as such,
guilty of deficiency in service ? Yes.
2. What order if any? As per final order passed below.
Issue No.1.
Complainant has filed this complaint against the insurance company in respect of policy taken for the barge which was being towed from Mumbai port to Rozi port, Jamnangr. Complainant had insured Kena-1 vessel for total amount of `19,50,000/- and paid premium of Rs.16,257/- and thereafter, policy dated 22/05/1992 was issued to the complainant which is marked as exhibit- E. According to complainant, after taking due approval of parties concerned Dhanprasad along with Kena-1 left Bombay port on 22/05/1992 for reaching its destination at Jamnagar. During the voyage part of machine Manifold broke down and hence on 27/05/1992 vessel was taken to Veraval port. At Veraval port machine was repaired after intimating to insurance company about braking of the part of the machine. At Veraval machine was repaired and thereafter, after getting the ship cleared, vessel proceeded to Jamnagar. On way to Jamnagar the connected shed and Hedni valve start of the engine broke down due to which on 04/06/1992 the barge along with vessel were taken to Mangrol. After repairing the ship on 12/06/1992, the vessel along with barge proceeded to Jamnagar when at 5.00 p.m. the sea was calm and weather was peaceful. But at midnight sea became violent and sudden wind started blowing from western direction. Due to this and purely due to natural causes the connection between the vessel and the barge broke down and the barge started getting dragged towards Magrol. The Tandel and other crew members of the ship tried to change the direction of the vessel but due to bad weather, it could not be done successfully. On 13/06/1992 the barge which was adrift and landed on the shore near the Mangorl port but since there was shallow water, the vessel Dhanprasad could not reach the barge. The crew from the barge jumped out safely. Thereafter, the crew from Dhanprasad went to Magrol port and tried to rescue the barge by tying the connecting ropes. This was not possible as there was major damage in the bottom part of the barge because of it having collided with the shore. Complainant informed the opponent by letter dated 15/06/1992 and requested them for survey of the barge so that he could arrange for removal of the barge to a safer place to avoid further damage. Then opp.party appointed Sea Scan Services Private Limited as surveyor. They made personal inspection of the barge and gave certain direction by addressing a letter to the complainant asking them to get quotations for shifting the barge to a safer place for port inspection. Complainant was asked on 24/06/1992 by the opponent to send a cheque on for ` 31,785.50 being the premium for five months to enable them to cover the risk. On 10/07/1992 further policy of `19,50,000/- was executed in favour of the complainant in respect to Kena-1 barge for the period from 10/07/1992 to 09/07/1993. Said copy of policy is marked as Exhibit-J. Complainant then invited quotation for shifting of the barge, but all attempts failed. Complainant further addressed letter to the opponent regarding efforts made to shift the barge and its inability to shift the barge and it was not refloatable and unsalvageable, Exhibit-M is the letter. Subsequently, at the direction of the Sea Scan Services Pvt. Ltd complainant requested one Venkatesh Engineering Works, Jamnagar to inspect the barge and move it to on floor place but Venkatesh Engineers concluded that barge was unfloatable and finally it was decided to sell it as scrap. Ultimately, the barge was sold for `3 lakhs as scrap. According to complainant, in this complaint they are claiming cost of material and labour for salvage and payment of barge at Mangrol as per second policy. Various correspondence was exchanged between the opp.party surveyor M/s Sea Scan Services Private Limited and Richard Hog International Limited, Bombay for adjustment of loss and scrutiny. Ultimately on 22/07/1997 opp.party replied for the first time after four years that there were several breaches committed by the complainant. Those breaches were that no approval from MMD before commencing voyage and for towing had been obtained before commencement of towing from Veraval and on this ground claim was repudiated in November,1998. So, this present complaint is filed for the insurance claim covering expenses incurred by them for salvaging barge. They also claimed interest@18% p.a. from June, 1993 and total claim in this complaint is ` 11,40,854.64. According to complainant, two policies were taken in respect of Kena-1 and it was obligatory on the part of opp.party to pay amount as per the policy and also to pay to the complainant expenses incurred by them towards repairing and trying to salvage the barge since it was damaged because of bad weather and wind blowing from western direction. According to complainant, barge was a duly registered vessel. It was in seaworthy condition and it was so surveyed by a register valuers M/s.Dave & Associates. The vessel or ship which towed the barge was also in seaworthy condition. Ultimately, barge was sold as scrap as advised by the opponent or their agent and till it was sold for making it refloatable, they incurred expenses of `5,69,413.30 and this amount is claimed by the complainant by filing this complaint. The affidavit has been filed by the complainant’s partner. The affidavit in rejoinder was also filed by Harish Keshria. Written statement filed by the insurance company is supported by affidavit sworn by Mr.Shriniwasan and therefore, it is also treated as affidavit.
We are finding that the only ground taken by the insurance company is that policy was issued subject to No Objection Certificate issued from Mercantile Marine Department and since that was not obtained, the claim was repudiated and it is the contention of the insurance company in its written statement cum affidavit. We have found that complainant filed yet another affidavit on 04/02/2009. In that affidavit he has specifically mentioned that before going for a voyage, they had obtained necessary documents such as Ultrasonic survey report on 21/05/1992 conducted by Satellite Services. A towing survey of the barge along with the towing vessel was conducted on 21/05/1992 by Dave & Associates wherein both the barge and towing vessel were found to be in seaworthy condition.
Complainant’s affidavit filed on 04/02/2009 clearly mentioned that on 22/05/1992 he had given cheque of Rs.16,257/- drawn on Co-operative Bank of Ahemdabad Ltd. with all the documents to late Bandish Gandhi, who as his agent submitted them to Oriental Insurance Co. Ltd. Thereafter, Oriental Insurance Co.Ltd. issued a cover note of insurance policy dated 22/05/1992. The cover note was handed over to late Bandish Gandhi on 22/05/1992 but he or his partners were not informed by the agent of Oriental Insurance Co.Ltd. that they were required to obtain a prior MMD approval. In para 11 of this affidavit he stated all the formalities required by the insurance policy were complied with the requirements of payments of all charges and formalities before the custom authorities were made after which they got a port clearance to embark on the journey and had moved out of Mumbai port. Later at Veraval also they had taken clearance of concerned authorities. Therefore, complainant submitted that insistence of insurance company that he should have taken clearance or NOC from Mercantile Marine department is nothing but an afterthought and on the date of sailing i.e. on 22/05/1992 the actual insurance policy was given to him only after the voyage had commenced. Only cover note was issued on 22/05/1992. Cover note did not mention a condition that before sailing for both the vessels, they should obtain NOC from Mercantile Marine Department.
In the circumstances, we are of the view that repudiation of the claim by the insurance company is wrongful. In the cover note they had not printed this term either orally or in writting. They had not informed the complainant that the NOC from Mercantile Marine Department is sine qua non before taking both the vessels out of Mumbai port for onward journey to Veraval. So, insurance company cannot be heard to say that there has been breach on the part of complainant firm in not procuring NOC from Mercantile Marine Department and on that ground insurance company cannot be allowed to take benefit of not paying insurance claim to the complainant firm.
In the circumstances, we are of the view that this is a fit case wherein the complaint should be allowed to direct insurance company/opp.party to pay a sum of `5,69,413.30 to the complainant since there is clear cut deficiency on the part of insurance company. We therefore record our finding on issue no.1 in affirmative.
We are also inclined to grant interest @9% p.a. on the amount negatived by the insurance company. Insurance company should have paid an amount of `5,69,413.30 within reasonable time. But repudiation of the claim insurance company took five years and therefore, interest@9% p.a. would be just and proper which could be awarded to the complainant firm for their own lapse of unpardonable nature.
Time has come to direct the insurance companies to decide the insurance claim strictly in accordance with the IRDA guidelines and they should not indulge in sending after communications to the insured so as to frustrate the rightful claim of the insured to get insured amount. Delay of five years cannot be said to be reasonable delay on the part of insurance company and therefore, we are granting interest@9% p.a. to the insurance company on the amount payable to the complainant firm. In the result, we pass the following order:-
:-ORDER-:
1. Complaint is partly allowed.
2. Opp.party is directed to pay ` 5,69,413.30 along with interest@9% p.a. from the date of filing of the complaint till actual realization of the entire amount.
3. The insurance company/opp.party is also directed to pay `20,000/- to the complainant as cost of proceedings.
4. Copies of the order herein be furnished to the parties free of cost.
